In a rapidly growing and evolving environment, organizations must be able to reconfigure their resource base in order to adapt to changes.

Several studies and research findings have already recognized knowledge management as a mean to enhance an organization’s dynamic capabilities and innovation. Effective knowledge management strategies have therefore become essential for an organization to achieve competitive advantage and finally innovate.

Among the challenges for an effective knowledge management strategy, the transformation of "tacit" knowledge, that exists only in the experiences and mind of individuals and as such is difficult to be codified and transmitted, into "explicit" knowledge, which instead can be easily expressed and documented, is essential to guarantee continuous organizational learning.

Modern software development processes, such as Agile, provide to organizations several knowledge sharing techniques, to aid in the transformation of knowledge from "tacit" to "explicit" one.

This study aims at investigating the impact of agile knowledge sharing methodologies on both dynamic and innovation capabilities of a selected case study organization, and further analyses the factors that may be contributing to such relationship.

The research is carried out by surveying a representative sample of employees of a German software development company, CompanyX. In total, 15 responses were received and a semi-structured face-to-face interview was conducted with one senior manager. Correlation and reliability testing are used as statistical tools to test both the reliability and validity of the model. Finally, the causality between the factors affecting knowledge sharing methodologies in use at CompanyX and the organization’s dynamic and innovation capabilities are analysed and compared to previous theoretical and empirical research findings.

Several important observations are made as a result of our study. In particular, the overall research findings demonstrate that agile knowledge sharing methodologies can act as enhancers of CompanyX dynamic capabilities and enablers of innovation.